What is a certificate of reasonable value?

A certificate of reasonable value is a document issued by the Department of
Veteran Affairs which states the maximum value of a property that is to be used as collateral for
a VA loan. A certificate of reasonable value can be seen as an approved appraisal of a
mortgaged property for Veteran Administration (“VA”) loans.

Since a certificate of reasonable value shows the maximum value of a property, it indirectly sets
the maximum value of a VA loan that can be granted to the borrower. When an eligible veteran
desires a mortgage loan under the VA, one of the requisite documents is the certificate of
reasonable value.

This certificate sets out the current market value of the property intended to be used as
collateral for the loan. To obtain the maximum value of the property, an inspection may be
carried out by qualified agents of the DVA. The inspection would cover the property itself and
the neighborhood where it is situated. Then prices of similar properties may be consulted before
an expert estimate is reached.

Once the value is determined from the appraisal, the veteran is issued with the certificate of
reasonable value.

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